Wrap Text
Interim Consolidated Reviewed Financial Statements for the Four Months Ended 30 June 2013
MAS Real Estate Inc.
(Formerly MAS plc)
Registered in British Virgin Islands
Registration number 1750199
Registered as an external company in the Republic of South Africa
Registration number 2010/000338/10
SEDOL (XLUX): B96VLJ5
SEDOL (ALTX): B96TSD2
JSE share code: MSP
ISIN: VGG5884M1041
("MAS" or "the company")
Interim consolidated reviewed financial statements for the FOUR months
ended 30 JUNE 2013
HIGHLIGHTS
- Net asset value increases to 98,4 euro cents per share
(28 February 2013: 96,9)
- Signs of improving market environment
- Financial year-end changed to 30 June 2014 to align with major
shareholder Atterbury Investment Holdings Limited
MAS is a real estate investment company with a portfolio of commercial
properties in Western Europe. The company aims to provide investors with
an attractive, sustainable euro-based dividend and strong growth in value
over time through its acquisition and asset management strategy. The
company's current investment focus is on Germany, Switzerland and the United
Kingdom.
The company announced its maiden dividend in December 2010 and has paid a
dividend twice yearly since.
The company is a closed-end investment company with an infinite life. It was
listed on the Euro-MTF market of the Bourse de Luxembourg on 12 August 2009,
where it has its primary listing, and on the Alternative Exchange ("AltX")
of the Johannesburg Stock Exchange ("JSE") on 31 August 2009, where it has
its secondary listing.
REPORTING CURRENCY
The company's results are reported in euro.
MARKET OVERVIEW
The commercial real estate investment market in the UK saw strong levels of
activity in the first quarter of 2013, with only marginally lower levels
of transactions in the second quarter. The general outlook for yields
across all sectors (except some secondary/tertiary retail) is either stable
or positive. As overseas investors continue to focus on prime property,
especially in the London market, the yield gap is increasing between prime
and secondary property. As a result, it is likely that there will be
increased focus from the more active investors on those properties offering
asset management and other added-value opportunities as well as good quality
regional properties.
Both the German and Swiss commercial real estate markets saw very high
levels of investment activity in 2012 and this has been repeated during the
first half of 2013. Driven by underlying strong economic factors in the
case of both countries, demand from both internal and external investors
has increased with the German market seeing more international funds and
sovereign wealth funds acquiring assets across most sectors in the market.
The Swiss market has been driven by investors looking for a mainland
European alternative to the eurozone real estate markets. It is therefore
further advanced in the property market cycle with the potential that some
sectors, such as prime offices in the main cities, may become overvalued.
However, with good stock selection, there are still attractive buying
opportunities in both Germany and Switzerland.
PORTFOLIO OVERVIEW
Gross Net rentals
property Property Gross (after
by value equity (1) rentals interest)
Euro Euro Euro Euro
Aldi portfolio/Germany 17% 3% 18% 11%
DPD property/Switzerland 31% 23% 26% 23%
Metchley Hall/UK 12% 18% 19% 22%
Sauchiehall property/UK 9% 13% 11% 13%
Santon North/UK 16% 22% 7% 8%
Braehead property/UK 13% 18% 19% 23%
Artisan IP 10/UK 2% 3% - -
1 Property equity is the property value less the amount of bank debt
borrowed against the property
PORTFOLIO VALUE 30 June 2013 28 Feb 2013
- by property size Euro Euro
Less than 5 000 000 3 508 335 3 488 444
5 000 001 - 10 000 000 39 147 333 38 386 359
Greater than 10 000 000 18 430 864 18 626 334
Total 61 086 532 60 501 137
The portfolio remains in the build-up stage with the cash on the balance
sheet in the process of investment. Notwithstanding the relatively small
number of investments currently held, there is already diversity within
the portfolio with a geographic spread across all three investment
jurisdictions, exposure to a number of market sectors and a maturing income
profile. The directors will be looking to continue growing the portfolio
within the parameters of the company's investment objectives.
The single-tenanted properties in Germany and Switzerland (the Aldi
portfolio in Baden-Württemberg, and the DPD logistics and office centre
outside Zürich) have continued to perform well. The long lease profile of
these properties (20 and 15 years respectively) and substantially fixed or
capped debt, deliver a long-term stable income flow.
In Scotland, the retail property located in the prime retail area of
Sauchiehall Street in Glasgow has been sublet on a short-term basis by the
former occupier HMV (UK). At the same time MAS continues to benefit from a
parent company guarantee from the EMI Group plc until the lease expires in
2015. The Braehead industrial property, with over 10 years remaining on the
lease, is let to a single, financially strong tenant, with excellent
longer-term asset management prospects.
Metchley Hall, the student residential development in Birmingham, started
generating income from September 2011, with a guaranteed gross annual rental
of £604 000. In terms of the nomination agreement with the University of
Birmingham, occupancy levels are underwritten at up to 97% until August 2014
and the income profile is now close to maturity.
The final two investments in the portfolio both have development prospects
and good progress has been made in realising these. Santon North Street in
Lewes, in East Sussex, has sustained its improved short-term income from
its variety of small tenants. Good progress has been made in recent months
with the redevelopment design. The change-of-use planning applications are
expected to be submitted before the end of 2013. The directors believe that
the investment in Artisan IP 10 (the large-scale mixed use development on
the Royal Mile in Edinburgh) should deliver very good levels of return. This
will be driven by the ultimate realisation of profits from the enhanced
development and planning rights, as well as the potential to secure
long-term income from well let investments at attractive yields.
INTEREST RATE HEDGES
The commercial benefit of the interest rate hedges is considerable, as
highly visible positive yield spreads are locked in over the life of the
investment. However, extremely long leases, and hence very long interest
rate hedges, result in substantial fluctuations in non-cash mark-to-market
valuations for the hedging instruments. The directors therefore remain
focused on cash generation within the business, and not the volatility
arising from the revaluation of long-term financial hedging instruments.
PROSPECTS
The company continues to progress well and significant headway has been made
with securing investment opportunities for the capital raised in February
2013.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
These interim consolidated reviewed financial statements have been prepared
in accordance with the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the principles of IAS
34: Interim Financial Reporting, and the Listings Requirements of the JSE
Limited, except to the extent that interim comparative information has not
been presented as indicated below. This is a departure from the requirements
of IAS 34: Interim Financial Reporting and is stated on the company's
external auditor's review report. The accounting policies adopted in the
preparation of the interim consolidated reviewed financial statements are
consistent with those applied in the financial statements for the year ended
28 February 2013. The interim consolidated financial statements have been
reviewed by the company's external auditors in accordance with International
Standards on Review Engagements 2410 and their review report is available
for inspection at the company's business address.
CHANGE IN YEAR-END AND COMPARATIVES
In order to align the year-end of the company with that of its major
shareholder Atterbury Investment Holdings Limited, the company has changed
its year-end from 28 February to 30 June. Accordingly, the next year-end of
the company will be 30 June 2014. The four months under review form an
interim period only prepared with a view of transition to 30 June 2014. As
a result of the change, no comparative figures for the same period in the
previous year are readily available and have not been presented.
VALUATION OF INVESTMENT PROPERTIES
Investment properties are valued annually by approved independent third
party valuers. In the interim accounts, the directors remain comfortable
with the valuations of the properties at the year ended 28 February 2013.
Considerable judgement is required in interpreting market data to determine
the estimates of value; accordingly the estimates of value presented in the
financial statement are not necessarily indicative of the amounts that the
company could realise in a market exchange. The use of different market
assumptions and / or estimation methodologies may have a material effect on
the estimated fair values.
EVENTS AFTER THE REPORTING DATE
The directors are not aware of any matters or circumstances arising
subsequent to the interim period that require any additional disclosure or
adjustment to the interim consolidated financial statements.
DIVIDEND
No dividend has been declared for the period under review. The first interim
dividend for the new accounting period is expected to be declared for the
10 month period ending 31 December 2013, and a second and final dividend is
expected to be declared for the 6 month period ending 30 June 2014.
By order of the board
Ron Spencer Lukas Nakos
Chairman Chief executive officer
Douglas, Isle of Man
Thursday, 18 July 2013
Registered office
In the British Virgin Islands:
Midocean Chambers
Road Town
Tortola
British Virgin Islands
Registrar
Computershare Investor Services (BVI) Limited
Registration number 003287V
Woodbourne Hall
PO Box 3162
Road Town, Tortola
British Virgin Islands
Directors
Jaco Jansen (non-executive)
Malcolm Levy (chief financial officer)
Lukas Nakos (chief executive officer)
Gideon Oosthuizen (non-executive)
Ron Spencer (non-executive chairman)
Company secretary
Helen Cullen
JSE sponsor
Java Capital
Business address
25 Athol Street
Douglas
Isle of Man
IM1 1LB
Transfer secretary
Computershare Investor Services (Proprietary) Limited
Ground floor
70 Marshall Street
Johannesburg, 2001
South Africa
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Reviewed Audited
Four months Year
ended ended
30 Jun 2013 28 Feb 13
Euro Euro
Revenue
Gross rental income 1 341 617 4 090 484
Expenses
Portfolio expenses (231 782) (676 254)
Investment adviser fees (322 733) (618 836)
Administrative expenses (222 645) (685 462)
Net operating income 564 457 2 109 932
Net fair value adjustments on investment property - (1 170 695)
Net fair value adjustments on financial instruments 539 606 (60 616)
Equity accounted (losses)/earnings (983) 20 128
Exchange differences 171 450 (848 219)
Profit before net finance expense 1 274 530 50 530
Finance income 27 180 11 614
Finance expense (222 534) (755 724)
Profit/(loss) before taxation 1 079 176 (693 580)
Taxation (53 908) (193 313)
Profit/(loss) for the period 1 025 268 (886 893)
Other comprehensive (loss)/income
Foreign currency translation differences (56 236) (217 330)
Total comprehensive income/(loss)for the period 969 032 (1 104 223)
Earnings/(loss) per share (euro cents)* 1,50 (2,06)
Headline earnings per share (euro cents)* 1,50 0,66
Weighted average number of ordinary
shares in issue 66 238 363 43 055 472
*There are no potentially dilutive instruments in issue.
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Reviewed Audited
As at As at
30 Jun 13 28 Feb 13
Euro Euro
Non-current assets
Investment property 57 578 197 57 012 693
Investment in associate 1 058 498 1 055 174
Loans to associate 2 449 837 2 433 270
Plant and equipment 43 345 47 577
Total non-current assets 61 129 877 60 548 714
Current assets
Short-term loans receivable 2 377 534 256 885
Trade and other receivables 990 616 753 610
Cash and cash equivalents 21 796 984 24 708 091
Total current assets 25 165 134 25 718 586
Total assets 86 295 011 86 267 300
Equity
Share capital 67 423 236 67 423 236
Retained losses (2 649 056) (3 674 324)
Foreign currency translation reserve 410 369 466 605
Shareholder equity 65 184 549 64 215 517
Non-current liabilities
Long-term loans payable 17 253 942 17 465 162
Financial instruments 1 973 662 2 522 790
Total non-current liabilities 19 227 604 19 987 952
Current liabilities
Short-term loans payable 486 302 491 460
Trade and other payables 1 396 556 1 572 371
Total current liabilities 1 882 858 2 063 831
Total liabilities 21 110 462 22 051 783
Total equity and liabilities 86 295 011 86 267 300
Actual number of ordinary shares in issue 66 238 363 66 238 363
Net asset value per share (euro cents) 98,4 96,9
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed Audited
Four months Year
ended ended
30 Jun 13 28 Feb 13
Euro Euro
Cash generated from operating activities 102 917 1 947 319
Cash (used in) investing activities (2 670 558) (5 755 370)
Cash (used in)/generated from financing activities (345 137) 22 673 370
Cash and equivalents at the beginning
of the period 24 708 090 5 742 861
Effect of exchange rate fluctuations on cash held 1 672 99 911
Cash and equivalents at the end of the period 21 796 984 24 708 091
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Foreign
currency
Share Retained translation
capital loss reserve Total
Euro Euro Euro Euro
Opening balance as at
28 February 2012
- audited 42 154 015 (1 295 506) 683 935 41 542 444
Loss for the period - (886 893) - (886 893)
Other comprehensive income - - (217 330) (217 330)
Total comprehensive loss - (886 893) (217 330) (1 104 223)
Issue of shares 25 269 221 - - 25 269 221
Dividends paid - (1 491 925) - (1 491 925)
Closing balance as at
28 February 2013
- audited 67 423 236 (3 674 324) 466 605 64 215 517
Profit for the period - 1 025 268 - 1 025 268
Other comprehensive loss - - (56 236) (56 236)
Total comprehensive income - 1 025 268 (56 236) 969 032
Issue of shares - - - -
Dividends paid - - - -
Closing balance as at
30 June 2013
- reviewed 67 423 236 (2 649 056) 410 369 65 184 549
SEGMENT REPORT - 30 June 2013
Euro Switzerland Germany UK
Statement of comprehensive income
Revenue 354 111 244 036 743 470
Profit/(loss) 540 227 462 961 523 899
Statement of financial position
Total assets 18 788 720 10 052 212 32 996 237
Euro Corporate Total
Statement of comprehensive income
Revenue - 1 341 617
Profit/(loss) (501 819) 1 025 268
Statement of financial position
Total assets 24 457 842 86 295 011
SEGMENT REPORT - 28 February 2013
Euro Switzerland Germany UK
Statement of comprehensive income
Revenue 1 079 540 732 108 2 278 836
Profit/(loss) 811 821 (117 805) 598 218
Statement of financial position
Total assets 18 881 246 9 959 003 33 231 251
Euro Corporate Total
Statement of comprehensive income
Revenue - 4 090 484
Profit/(loss) (2 179 127) (886 893)
Statement of financial position
Total assets 24 195 800 86 267 300
RECONCILIATION OF PROFIT/(LOSS) FOR THE PERIOD TO HEADLINE EARNINGS
Reviewed Audited
Four months Year
ended ended
30 Jun 13 28 Feb 13
Euro Euro
Profit/(loss) for the period 1 025 268 (886 893)
Adjusted for:
Revaluation of investment property - 1 170 695
Headline earnings 1 025 268 283 802
Weighted average number of ordinary
shares in issue 66 238 363 43 055 472
Headline earnings per share (euro cents) 1,50 0,66
Date: 31/07/2013 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
